a flashy brochure or charmed by a fast talking sales
agent. But armed with your “business plan” it should
be easy to decide whether or not a particular market
is right for your offshore portfolio.
If you decide that you want the opportunity to
make big profits quickly, and you are comfortable
with the higher risk involved – emerging economies
like Cyprus, Croatia, Panama, Brazil, and India
could be right for you. Just keep in mind that as a
South African investor, chances are you have already
invested in the SA economy, which itself is an
emerging economy. By investing in other emerging
world economies you will significantly increase your
risk profile. However, if you wish to diversify your
portfolio and spread your risk, look at tried and
tested developed markets such as the UK, which is
the most popular in SA, Australia or New Zealand.
3
Decide on your strategy
Now that you have decided on your market,
you need to be crystal clear on what strategy
you are going to follow to build your portfolio.
Will you focus on residential property, commercial
buildings or land? If you decide on residential
property – will you be buying flats or houses? Are
you attracted to new properties with minimum
maintenance required, or a rundown property with
potential for big profits once renovated? For some
8
Offshore Handbook 2016
investors, price is all that matters, and they will
voraciously snap up anything, anywhere and in any
condition so long as it’s cheap. Others are prepared
to pay that little extra and selectively cherry pick
deals from new developments in up and coming
areas. There is undoubtedly a market for both of
these approaches, but be sure to stick to your strategy.
4
Get tax advice and SARS clearance
Often these professionals can use your status
as a foreign owner favorably and minimise
your tax liability. In the UK, for example, it is
possible to get a remittance so that withholding tax
is not imposed on your rent if your tax jurisdiction
is in another country. Having expert, impartial and
specific advice when it comes to tax planning is an
essential cornerstone of sound financial planning.
Whether you are buying a property in the UK or
elsewhere, in order to build an investment portfolio,
effective tax planning will help you protect your
capital as well as increase your income. Your tax
advisor will also be able to help in obtaining your tax
clearance certificate from SARS so that you can make
use of your £4 million foreign investment allowance.
When done correctly, getting your certificate could
take as little as five days, but errors and incomplete
information can easily drag the process out to 6–12
weeks.
www.reimag.co.za